Wise Estate Planning is Never One and Done

Sometimes it must seem as if plans devised for estate and investment planning are like city buses: another one will be along shortly, headed in a completely different direction.

It is simply a fact, and admittedly a frustrating one for advisors and clients alike, that the world and people’s lives are changing so rapidly, what was sound counsel yesterday might not be so wise tomorrow.

“One of the most common mistakes that people make in estate planning is that once they establish the plan, they do not review it on a regular basis to include any additional assets that they acquire,” offers the website lawcore.com. “For example, if you only had a bank account with enough money to cover your funeral expenses and then you win a lottery, you will have to have plans in place for the disbursement of the funds, so that this money is not subject to taxes and that each of your heirs will get equal amounts. You may want all of it to go to a specific charity, but if this is not detailed in your estate plan, it will not happen. You may start to dabble in the stock market and make a lot of money after your estate plan is written. You need to make arrangements for the sale or transfer of the stocks to a specific person. The provisions of your will cannot change the name of the beneficiary of any of your accounts, which includes life insurance. You need to review your will when planning your estate as well.”

“By researching the estate planning process, you are taking important steps towards protecting your loved ones after your death. However, an incorrectly created plan could create problems that you won’t be around to fix. Things change. People die ‘out of turn,’ or get divorced, or have judgments against them,” according to Florida Statewide Wills, a service of the Pensacola law firm McDonald, Fleming, Moorhead, Ferguson, Green & de Kozan, LLP. “Too many people draft a fine will and then forget about it. Usually the will is still valid, but the plan stated in the will may no longer accomplish your goals due to changing circumstances. Once you have an estate plan, be sure to review it and update it at least every five years and whenever there are major changes for those named in your will and trusts, especially those you have given your power of attorney. An estate plan is not complete if it assumes that all the children will outlive the parent, or nothing will happen to the person you selected to raise your minor child or gave durable power of attorney. The best estate plan takes a ‘Murphy’s Law’ approach, if anything can go wrong, it will, and includes backup provisions.”

“Changes in law and the inevitable changes in the nature and value of your assets may necessitate changes to your estate plan,” points out the website of Foster Swift, a law firm with offices in Michigan. “In addition, you should review your estate plan after any major family change, such as a birth, adoption, death, or divorce. We suggest a formal review of your estate plan at least every five years to determine if any changes are appropriate.”